Solving Large Problems Without Heroic Assumptions

One of the most common mistakes people make when confronted with a large future obligation is assuming it requires an equally large amount of capital today, or extraordinary returns to bridge the gap.

That instinct is understandable. It is also often wrong.

This is not a post about raising capital, nor a solicitation of any kind. It is an analytical exercise meant to show how seemingly impossible numbers can often be addressed through sequencing, compounding, and structure rather than bravado. Recently I outlined how with “only” $380M you can solve the equation and secure funding to bring back the Expos in my model.

The Question

If a future obligation requires $1.25B in net proceeds by roughly 2029–2030, does that mean one must either:

  • raise $1.25B upfront, or
  • generate extreme annual returns?

The answer is no.

The key insight is that capital does not have to be equity, and returns do not need to be extraordinary, provided the structure is sound.

Reframing the Problem: Capital as a Loan, Not Equity

Instead of assuming permanent capital or a heroic family office check, consider a more institutional construct:

  • a loan-funded investment vehicle,
  • capital is borrowed, not owned,
  • the loan is repaid in full,
  • only the net proceeds are applied toward the $1.25B obligation.

This is how sophisticated capital allocators think. What matters is the net outcome, not gross assets.

Base Assumptions (Intentionally Conservative)

  • Target net proceeds: $1.25B
  • Time horizon: ~5 years
  • Gross investment return: 25% per annum
  • Cost of capital (loan): 10% per annum

This is intentionally conservative (my returns in the past 3 years were 65%, 45% and will be 50% this year) and above typical senior credit. The net spread is approximately 15% per annum.

There is no leverage-on-leverage, no terminal multiple assumptions, and no exit multiple expansion. This is not financial alchemy. It is disciplined compounding.

The Math (Plain English)

Assume a loan-funded vehicle with $600M in borrowed capital.

Step 1: Grow the Gross Assets
At 25% annual growth over 5 years:

600M × (1.25)⁵ ≈ 600M × 3.05 = 1.83B

Step 2: Repay the Loan
A $600M loan at 10% annually over 5 years compounds to:

600M × (1.10)⁵ ≈ 600M × 1.61 = 966M

Step 3: Net Proceeds

1.83B − 966M ≈ 864M

That alone does not reach $1.25B, but this is where timeline reality matters.

Why the Timeline Changes Everything

The $1.25B requirement is not due upfront. It is called in tranches, with the largest payment occurring late in the process.

This allows for partial monetization, recycling gains, incremental capital deployment, and layered financing closer to certainty.

If we adjust the structure modestly, still conservatively:

  • increase initial loan capital to $800M,
  • keep all assumptions unchanged.

Gross value after 5 years:

800M × 3.05 ≈ 2.44B

Loan repayment:

800M × 1.61 ≈ 1.29B

Net proceeds:

2.44B − 1.29B ≈ 1.15B

Now factor in interim distributions, reinvested gains, and the fact that not all capital needs to be held until year five. Net proceeds approaching or exceeding $1.25B become entirely plausible without extreme assumptions.

A Word on Capital Raising vs Capital Appreciation

There is a subtle but important distinction that often gets overlooked.

I am far better at capital appreciation through investing and operating than I am at capital raising, particularly because many gatekeepers (eg. financial advisors) do not have an incentive to encourage their investors to divert money from funds they manage (and thus earn management fees) into rare assets they do not.

Even a finder’s fee does not compare to the annuity of management fees they earn by keeping capital inside their own vehicles. In theory, advisors want to be the ones who “add value” by surfacing unique opportunities. In practice, incentives are more complex, and sometimes misaligned.

Recognizing this dynamic leads to an interesting thought experiment.

If an advisor could land the one long-term HNWI or family office partner required, why wouldn’t I consider giving them discretion over managing my assets? Quid pro quo? Perhaps. But if the purpose is noble, the structure is sound, and the outcome creates lasting value and shared joy, such arrangements are not irrational. They are simply honest about incentives.

Understanding incentives does not mean being cynical. It means being realistic.

What This Exercise Is Actually Demonstrating

This analysis is not about precision to the dollar. It is about reframing.

It shows that:

  • the problem is one of capital choreography, not capital scarcity,
  • disciplined returns matter more than headline returns,
  • structure can matter more than scale,
  • sequencing often matters more than speed.

Most importantly, it demonstrates that solving a billion-dollar future obligation does not require billionaire psychology.

It requires patience, governance, and respect for compounding.

Final Thought

When people hear large numbers, they default to binary thinking. Either someone writes a massive check, or the idea is dismissed as unrealistic.

Serious projects are rarely solved that way.

They are solved by aligning timelines, choosing the right instruments, and refusing to confuse difficulty with impossibility.

This analysis does not assert certainty. It does not promise outcomes. It does not ask for capital.

It simply shows that when problems are approached with structure rather than emotion, the range of feasible solutions expands dramatically.